Key takeaways
- Tencent reportedly leases 100,000 advanced AI chips from Oracle for five years.
- The reported deal is worth about $7 billion, with 30% upfront.
- U.S. export curbs are pushing Chinese firms toward overseas AI computing capacity.
Tencent has agreed to lease about 100,000 advanced AI chips from Oracle for five years across Southeast Asia, the Financial Times reported Wednesday, as the Chinese company expands its AI operations.
Tencent secures overseas AI computing capacity
The reported agreement marks Tencent’s largest overseas lease deal and is estimated at about $7 billion, with roughly 30% to be paid upfront, the Financial Times said, citing people familiar with the matter.
The lease covers multiple Oracle data centers in Southeast Asia and was agreed to this year, according to the report. The Tencent AI chips are not available in China, giving Tencent access to advanced computing capacity outside the country.
The Financial Times described the arrangement as access to “approximately 100,000 advanced AI chips” held at Oracle data centers across Southeast Asia.
Reuters could not independently verify the Financial Times report. Oracle and Tencent did not immediately respond to Reuters requests for comment.
AI expansion drives Tencent’s chip demand
The deal for Tencent AI chips comes as Tencent increases spending on artificial intelligence, including the development and deployment of large language models. The company is using AI across products and services as competition among major Chinese technology companies intensifies.
Tencent has also expanded its work in generative AI for creative applications. Its cloud documentation says its image-generation services support “text-to-image generation” and image-to-image generation for content creation and other uses.
The company has released a preview of a new AI image-generation model aimed at professional creators, according to Reuters. The development adds to Tencent’s broader push to build and deploy AI systems that require large amounts of computing power.
Tencent’s reported agreement with Oracle reflects the growing infrastructure demands of advanced AI models. Training and operating these systems can require large-scale access to specialized processors and data-center capacity.
U.S. curbs push Chinese firms overseas
The reported lease also highlights the challenge Chinese technology companies face as U.S. restrictions limit access to some advanced AI processors. Chinese firms have increasingly sought ways to secure computing resources while Beijing promotes domestic alternatives to U.S. technology.
The Financial Times reported that the Tencent AI chips involved are primarily advanced Nvidia processors. Their availability outside China could give Tencent access to hardware it cannot readily obtain within the country.
The deal also shows how cloud providers are becoming important partners in the global AI race. Instead of owning all computing infrastructure directly, companies can secure capacity through long-term agreements with cloud operators.
Reuters said it “could not immediately verify the report,” underscoring that the reported value, chip count and lease terms have not been independently confirmed by the company or Oracle.
For Tencent, the reported five-year arrangement would provide a long-term source of AI computing capacity as the company expands its models, tools and applications. For Oracle, it would represent a major overseas cloud commitment involving one of China’s largest technology companies.
